How to Calculate Net Rental Income from Spanish Property
The gap between gross and net rental income in Spain can be surprisingly large. A property advertised with a 6% gross yield may deliver only 3% to 4% net after all costs. Understanding every line item is essential before you commit to a purchase.
Step 1: Calculate Gross Rental Income
Start with realistic rental estimates, not agent projections. Check comparable listings on Idealista, Fotocasa, and Airbnb for your specific location and property type. A two-bedroom apartment in Marbella might achieve:
- Long-term: EUR 1,200/month = EUR 14,400/year gross
- Short-term: EUR 180/night average, 65% occupancy = EUR 42,705/year gross
Short-term generates more revenue but comes with higher costs. Use conservative occupancy estimates: 55% to 65% for most Costa del Sol locations, higher in Malaga city.
Step 2: Deduct Operating Costs
Operating costs for a typical rental apartment in Spain include:
- Community fees (cuota de comunidad): EUR 80 to EUR 200/month
- IBI (property tax): EUR 400 to EUR 1,200/year
- Basura (waste collection tax): EUR 100 to EUR 300/year
- Home insurance: EUR 200 to EUR 400/year
- Maintenance reserve: 1% to 2% of property value per year
- Utilities (if included in rent): EUR 100 to EUR 200/month
Step 3: Deduct Management Costs
If you use a management company:
- Long-term management: 8% to 12% of gross rent
- Short-term management: 15% to 25% of gross rent
- Cleaning per turnover (short-term): EUR 50 to EUR 80
- Linen and laundry: EUR 15 to EUR 25 per turnover
Step 4: Calculate Tax Liability
Your tax depends on residency status:
- EU/EEA non-resident: 19% on net income (after deducting proportional expenses)
- Non-EU non-resident: 24% on gross income (no deductions allowed)
- Spanish resident: progressive rate 19% to 47%, with 60% reduction for primary residence rentals
Step 5: Account for Vacancy
No property is rented 365 days per year. Budget for vacancy:
- Long-term: 1 month vacancy every 2 years on average (4% vacancy rate)
- Short-term: 35% to 45% vacancy across the year (higher in winter)
Worked Example: Two-Bedroom Apartment in Fuengirola
Purchase price: EUR 180,000. Long-term rental at EUR 900/month.
- Gross annual income: EUR 10,800
- Community fees: -EUR 1,440
- IBI: -EUR 600
- Insurance: -EUR 300
- Maintenance reserve: -EUR 1,800
- Management (10%): -EUR 1,080
- Vacancy (4%): -EUR 432
- Net before tax: EUR 5,148
- Tax (19% EU non-resident): -EUR 978
- Net after tax: EUR 4,170
- Net yield: 2.3%
This example shows why due diligence on costs matters. The gross yield of 6% becomes 2.3% net after all deductions. Still a positive return, but very different from the headline number.
Use our free calculator to estimate your total costs with your own property details and see your projected net yield instantly.
Tips to Improve Net Yield
- Self-manage to eliminate the 10% to 25% management fee
- Buy in areas with low community fees
- Mix short-term and long-term rental to optimise seasonal gaps
- Furnish thoughtfully to command higher rents without overspending
- Maintain the property proactively to avoid costly emergency repairs